If he is living paycheck to paycheck, he's probably better off paying off the mortgage (actually, he should sell the house and buy something more affordable and invest the difference). 

I’ve been searching for affordable alternatives that can still automate transactions without pushing us back to Excel.

Whatever you use, highest mil layer you can afford, 100% vinyl so that it's waterproof, use a good underlayment. 

I’d buy there as much as I can comfortably afford regardless of MTR strategy.

4) Would It be easier to borrow that money knowing that I am trying to provide affordable housing in the governments eyes?

If you did not and it’s unsecured debt you could be out of luck on some or all of the money as depending on his situation unsecured creditors in a bk may receive pennies on the dollar depending on what he can afford and if converted to a ch 7 you would get wiped out.Even in 2nd position he could argue the property is underwater and wipe out your lien.

By not paying tax today, that money can be used by you productively to earn MORE money.

If in a tenant-friendly state, the Payment Plan may make sense - but only if tenant signs document stating specific payment dates & amounts and can update their income info to prove they can afford the payments.

In my market you can get an additional unit for each affordable rent unit.  

Housing affordability is definitely a hot topic in Texas these days.